Complaints about a £5m recycling plant in Marsham means Norfolk's food waste now has to be processed two hours away in Northamptonshire.
The Marsham composting facility was initially designed to take 32,000 tonnes of garden and food waste when it was built in 2010 by Norse Environmental Waste Services (NEWS).
It was financed by Norse, a company owned by Norfolk County Council, and £1m of public money through a Waste Resources Action Programme (WRAP) grant.
But three years after opening, NEWS stopped all food waste processing due to odour complaints from people living nearby.
Now, food waste collected in Norfolk has to be transported two hours away to Rushden for it to be processed – rather than a 20-minute drive.
David Newell, operations director at NEWS, said the facility was built after North Norfolk District Council indicated it would start collecting food waste.
He said NEWS 'reacted' to the announcement and predicted that other councils would follow suit.
Around the same time planning permission was granted, NEWS was taken in by the Norse group in 2009, and the company agreed to continue with the scheme.
'It was a good business model at the time,' Mr Newell said.
But he added: 'Very soon after, North Norfolk council made the decision not to collect food waste after all.'
He said NEWS had to then try to secure food waste contracts from elsewhere, which it did with Norwich City Council, the Borough Council of King's Lynn and West Norfolk and Broadland District Council.
But following multiple complaints to the Environment Agency about the smell from the facility, NEWS decided to halt its food waste recycling in 2013.
A Norse spokesman said that because the company was contractually obliged to accept and treat food waste it had to make arrangements to receive and send it elsewhere.
Food waste is now taken to an anaerobic digestion plant around 100 miles away, owned by a company called Biogen. Norse said it had been done at 'no extra cost' to taxpayers.
Lesley Wilcocks, a Marsham parish councillor, said: 'It was always our contention that this was totally in the wrong place, upwind and close to the village.
'After a couple of years of operation our fears were proven to be completely correct.'
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